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PC Capacity In China Will Increase By 280,000 tonnes

November 4, 2020
While the numbers point to a potential global oversupply, the growth in global demand will most likely absorb the new capacities.

PC capacity in china will increase by 280,000 tonnes in 2020, according to recent research by GC Intelligence.

China has pursued self-sufficiency in PC for the past few years. As a result, the polycarbonate (PC) market has seen new Chinese companies entering the global market.

The increase in PC capacity in 2020 in China follows an increase of 325,000 metric tonnes in 2019. This will take the total number of PC producers in the country to 11, of which 7 are Chinese.

More is yet to come

More companies and expansions are expected in 2021, adding a further 740,000 tonnes of PC capacity in the country.

These are astonishing figures that could lead many observers to predict a global oversupply of PC.                     

However, while PC capacity in China is set to increase, it is not a given that the global market is heading towards oversupply.

It is true that production capacity will increase, but operating rates will most likely increase gradually. Production will probably increase in line with market conditions.

As seen in the past few years, Chinese companies have entered the PC market slowly and with minimal disruption.

The evidence of this is that PC prices and margins in China have not collapsed. This is despite the increases in capacity in the past few years.

Therefore, it reasonable to assume that it is unlikely that in the next few years Europe will see a spike in imports from Asia.

European expansion

But at the same time, this does not mean that Chinese companies will not participate in Europe.

China polycarbonate capacity increase 2019 to 2021

Several of these companies are global players and will most likely pursue expansion globally and in Europe.

Moreover, market feedback suggests that at least two Chinese PC producers are actively offering PC in and around Europe.

While it will probably not happen overnight, it is highly likely that in the years to come, European buyers will have additional supply sources from China.

Therefore, while the initial numbers seem worrying, the threat to the European market remains minimal for now.

But for sure Chinese companies will soon be ready to capture future global growth in PC demand, which for the most part will be in China.

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